Landlords need insurance too! Investing in rental properties is becoming an increasingly popular way to acquire wealth outside of the stock market. The housing market slump and the recent gains mean many opportunities for investors. Owning rental property offers a sense of security, but also comes with its own unique set of risks.
Unlike investing in stocks and mutual funds, rental properties are at risk of physical damage. They can get struck by lightning, flood, be affected by hurricanes and tornadoes, and can be destroyed by tenants. This obviously will affect the value of the investment.
The other risk that investment properties pose is the risk of the owner being sued. Accidents such as slip and falls, dog bites, and illnesses can put a rental property owner in a great deal of financial risk.
Fortunately, Erb and Young can help. Insurance Policies for rental properties often are very similar to a standard homeowner’s insurance policy. The biggest difference is that they don’t require the owner to occupy the home. They also usually have a lot less personal property coverage, unless the rental is furnished. These policies provide coverage for:
Some savvy investors have been able to acquire large portfolios of rental properties. These rental property managers may require a different approach to insurance. Keeping track of a different policy for each individual property can be confusing. In order to make the management of your properties easier, Erb and YoungInsurance can schedule multiple properties on one commercial property policy. Doing this allows a rental property manager to only to keep track of one insurance policy, one payment, and one renewal each year. If you buy and sell properties on a regular basis, a simple request to add or remove a location is all that is needed to update your coverage.
Erb and Young Insurance also recommends that renters and tenants have their own policy and that all landlords require their tenants to have this important coverage.
Renter’s policies provide coverage for a tenant’s personal belongings. This is often overlooked by tenants because the landlord has their own coverage for the home. After fires or storms many tenants are left having to replace their personal belongings with money from their own pockets because they didn’t buy renters insurance.
Renter’s Insurance also provides liability coverage. This is important for both the tenant and landlord if an accident or injury occurs. If a tenant is responsible for a covered accident, the liability coverage in a renter’s policy will protect the tenant from lawsuits. The liability coverage also provides an extra layer of coverage to protect the landlord. The insurance provided by the tenant will keep the landlord from being named as a responsible party in an accident.